Every time I hear that the administration needs to focus on job creation or that X number of jobs have been created last month, I can’t help but wonder what kind of jobs people are talking about. Because it’s not just jobs we need. America desperately needs well-paying jobs. The type of jobs that will allow workers to buy more than the bare necessities. The type of jobs that make home ownership possible. The type of jobs that do not leave workers dependent on government assistance. The type of jobs that produce substantial tax revenue. The type of jobs that have been eliminated in droves to be replaced–in so far as they are replaced at all–by ever lower paying jobs.
The reason the economy–and with it the country–is going down the tubes can be summed up as too much wealth in too few hands. For a while, rising property values and easy availability of consumer credit shielded most people (and the economy as a whole) from feeling the pain associated with stagnant middle and working class wages, but the massive income inequality at the root of our problems has been in the making for at least thirty years. And it has finally caught up with us. The growing number of people at the bottom of the income pyramid are going without because they can’t afford to buy much-needed products and services, while those at the top horde much of their income because they already have far more than they will ever need. Unfortunately their greed knows no bounds, so we’re seeing 25% pay increases for senior executives, while low income workers in the same company must subsist on minimum wage.
Speaking of which, what’s the point of having a minimum wage that doesn’t pay enough to live on? At $8/hr, California’s minimum wage is higher than the federal minimum wage, but it’s still grossly inadequate. According to the California Budget Project, a single adult with no kids needs to earn twice the minimum wage just to make ends meet. Note that this budget does not allow for any vacation time ever (unthinkable in the rest of the developed world), nor does it include saving money for retirement or a down payment on a house. Also not included are dental/vision coverage/care, Internet access, cable or satellite TV, costs of having a pet, travel, entertainment (e.g., movies, concerts, video games, music), or saving for emergencies (such as car repairs or the included health care plan’s $500 deductible). And, of course, the cost of having and raising kids isn’t included. Families with children need to earn three to four times the minimum wage to get by.
When Californians without kids make less than $16/hr, they must either work substantially longer than 40 hours per week and/or receive government assistance and/or get by without necessities such as food, housing, transportation, and health care. And when the government is forced to assist low income workers employed by large corporations with food, housing, or health care expenses, taxpayers are essentially subsidizing the shareholder profits and humongous executive salaries of companies that can’t be bothered to pay their workers a living wage. Not letting them get away with this would be a good first step.
Small businesses are trickier. I’m not talking about the “small” business with 500 employees or the small business owner who buys himself a new Jaguar while his secretary makes $10/hr with no benefits. But for a struggling entrepreneur, paying $16-20/hr may not be possible. I realize there are those who argue that undercapitalized entrepreneurs shouldn’t be the problem of either workers or the government, but I don’t see how we benefit if entrepreneurs give up their dream of running their own business and rejoin the workforce as employees. So, in cases of genuine financial hardship, I would favor the government temporarily subsidizing the wages of small business employees to make up the difference between today’s minimum wage and a true living wage in the hope that the business can become profitable enough to pay workers what they’re worth.
Instituting a living wage for the lowest income workers would provide a tremendous boost to the economy because, unlike extra income flowing to the wealthy, every additional dollar going to low income workers is pumped right back into the economy, increasing demand for goods and services and decreasing the need for government assistance. And yet, living wage jobs would pay just enough to get by. There’s no discretionary income for large consumer purchases and no room for savings, nor do these jobs produce substantial tax revenue. That will require creation of the type of middle income jobs that were once the backbone of the American middle class.
Unfortunately middle income jobs are exactly what’s being eliminated. According to the Bureau of Labor Statistics, there are now 17 million college-educated Americans working in jobs far below their educational level (to say nothing of the millions, including many recent graduates, who can’t find work at all), and yet we’re still hearing that the problem is an “education gap” or a “skills mismatch.” If only the unemployed and underemployed would acquire new skills or get a college degree, everything would be fine.
What complete and utter bullshit. The problem isn’t a lack of skilled workers; the problem is a lack of well-paying jobs. THAT is where the focus needs to be. But that’s a systemic problem requiring systemic solutions, and we’d much rather focus on individual solutions. After all, there’s no systemic injustice and exploitation going on in this country. Low income workers just need to learn to budget better! The unemployed and underemployed just need to go back to school to rack up more skills and degrees–and more debt! Anything to keep the focus away from the class warfare the rich have been waging against the rest of us for over thirty years.